Nigerians woke up this morning to the news of a merger between Tier-1 Bank, Access Bank and Tier-2 Bank, Diamond Bank.
For industry watchers, the deal is a long anticipated one. While the two financial institutions have released a statement confirming the signing of Memorandum of Agreement.
Nairametrics brings to you a compilation of reactions by Analysts and Stock Brokerage firms on the new merger agreement.
NIGERIA | DAILY
Banks
A huge M&A in the Nigerian Banking Sector@Nairametrics @proshare @ugodre pic.twitter.com/VFGMlnYS6K— CSL Stockbrokers Ltd (@CSLStockbroking) December 17, 2018
High impairments, especially with respect to loans to the mid stream oil and gas sector have been largely responsible for Diamond Bank’s poor performance in recent years and and has been responsible for its weak capital position.
— CSL Stockbrokers Ltd (@CSLStockbroking) December 17, 2018
Diamond Bank has a strong retail franchise especially on the liability side giving it the lowest funding cost among peers. A merger with Access Bank, which still has a relatively high funding cost will help the bank grow low cost liquidity base.
— CSL Stockbrokers Ltd (@CSLStockbroking) December 17, 2018
Diamond Bank has consistently grown deposits even in the face of paucity of deposits and has a relatively robust digital platform – As at end of June 2018, over 3 million customers are on Diamond Mobile App.
— CSL Stockbrokers Ltd (@CSLStockbroking) December 17, 2018
What are the shareholders associations doing on this or they have been settled? What kind of M&A is this? Was there any AGM/EGM that all these issues were fully disclosed and the regulatory bodies did what is appropriate? These are grave issues if these didn't happen…
— John Wesey (@johnwesey) December 17, 2018
Dear @SECNigeria and @cenbank the ineptitude of board members is costing shareholders alot of money. Where are your regulatory powers? Skye=Polaris now Access~Diamond in it all culprits should be held liable for playing pingpong with shareholders funds! @BBoason
— Torino (@oodije) December 17, 2018
Well it appears the CBN tacitly dodged a bullet by pushing this through in an attempt not to repeat a "Skyebank". Imagine the reaction if the CBN had recapitalised the bank with Billions to "save depositors funds", at a time many elites have issues with micro credit to traders.
— Yinka Ogunnubi (@yinkanubi) December 17, 2018
Access bank swallowed Diamond bank..
My school fees next semester is there ooooo.
I didn't do MMM oo 😢
— Kingston James 🇳🇬⚽️ (@coach_James29) December 17, 2018
2/ This challenge by two banks in quick succession, sends a signal that authorities must take seriously. We need to look critically at the underlying problems and develop strategies to address them @BBoason @CTVtempili @BizMorning @Channels24_UK @channelstv @cenbank
— Dr. Ikpenmosa Uhumuavbi (@ikpems) December 17, 2018
4/ Nigeria needs a Competition Commission as a regulator and Competition Law/Regulation. The Diamond Bank deal needs a report from that body. The @SECNigeria acting in that capacity should work with the @cenbank to provide guidance @BBoason @CTVtempili @BizMorning @channelstv
— Dr. Ikpenmosa Uhumuavbi (@ikpems) December 17, 2018
Access Bank @myaccessbank – #Nigeria's confirmed Broad Street acquirer – moved on @UNIONBANK_NG during consolidation, got #Akingbola's #IntercontinentalBank and now buying @DiamondBankNG Someone up Broad Street in that red-logo sky-scrapper would be green with envy.
— Boason Omofaye (@BBoason) December 17, 2018
Both @myaccessbank and @DiamondBankNG are burdened with Outstanding Shares in issue:
-Access: 28.927bn
-Diamond: 23.16bn
At whatever share exchange, new @myaccessbank will still be loaded down with huge Outstanding Shares. unless a Share Restructuring or Buy-Back takes place— Boason Omofaye (@BBoason) December 17, 2018
Access actually parting wt only N23.16billion cash in this https://t.co/3YClGAAc4o this the fair price for a bank with asset base of N1.5trillion and shareholders' fund of N220billion?
Fixed asset value alone is N68billion.
Net asset is currently N220billion.
This is fraud!
— Folorunso Ayo Dada (@FolorunsoDada) December 17, 2018
On Access Bank and Diamond Bank.
Another example that unnecessary denials & shady runs are as bad in the corporate world as they are in the Public Sector.
Diamond kept denying this deal till the very end. Result of unpaid/nonperforming loans largely taken by the Dozie family.
— Ayò Bánkólé (@AyoBankole) December 17, 2018
In Nigeria, deceit is the tool that Our political, spiritual , and business Leaders are using to lead us; the two parties earlier denied the news. There is possibility that toxic asset of Diamond Bank would contaminate Merged asset. NBV of Diamond Bank as at 30/09/2018 was NGN 9.57 but it traded at NGN0.87 on 13/12/2018; there are many factors that could lead to such wide gap, We should not be oblivious of the huge write-off that followed some previous merger and acquisition.